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Eight years later, India Inc more vulnerable

Corporate indebtedness is now twice what it was before global financial crisis; banks' bad loans ratio is 3.5 times higher

Krishna Kant  |  Mumbai 

Corporate India and banks are much less prepared for an economic slowdown than they were on the eve of the 2008 global financial crisis based on key ratios.  The corporate debt-equity level is now twice that during 2007-08, while corporate profitability during 2015-16, as measured by return on equity, was half that in FY08. Their debt servicing capability also shows a similar trend. Ex-financials companies from the BSE 500 index universe reported a return on equity of 11.5 per cent in FY16, down from 22.1 per cent in FY08.  Banks are in an even worse position than ...

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Eight years later, India Inc more vulnerable

Corporate indebtedness is now twice what it was before global financial crisis; banks' bad loans ratio is 3.5 times higher

Corporate indebtedness is now twice what it was before global financial crisis; banks' bad loans ratio is 3.5 times higher Corporate India and banks are much less prepared for an economic slowdown than they were on the eve of the 2008 global financial crisis based on key ratios.  The corporate debt-equity level is now twice that during 2007-08, while corporate profitability during 2015-16, as measured by return on equity, was half that in FY08. Their debt servicing capability also shows a similar trend. Ex-financials companies from the BSE 500 index universe reported a return on equity of 11.5 per cent in FY16, down from 22.1 per cent in FY08.  Banks are in an even worse position than ... image
Business Standard
177 22

Eight years later, India Inc more vulnerable

Corporate indebtedness is now twice what it was before global financial crisis; banks' bad loans ratio is 3.5 times higher

Corporate India and banks are much less prepared for an economic slowdown than they were on the eve of the 2008 global financial crisis based on key ratios.  The corporate debt-equity level is now twice that during 2007-08, while corporate profitability during 2015-16, as measured by return on equity, was half that in FY08. Their debt servicing capability also shows a similar trend. Ex-financials companies from the BSE 500 index universe reported a return on equity of 11.5 per cent in FY16, down from 22.1 per cent in FY08.  Banks are in an even worse position than ...

image
Business Standard
177 22

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